British universities would go into red if overseas intake fell

Seven British universities would go into the red if there was only a slight decline in overseas students, according to research.

By Matthew Moore

5:09PM GMT 20 Nov 2008

Exeter University and the Royal Academy of Music are among the institutions which would face serious financial trouble in the event of a 10 per cent fall in their foreign intake.

Many British universities have to come rely on the higher fees of overseas students to balance their books and help subsidise the tuition of UK students, with eleven institutions taking more than 25 per cent of their teaching income from foreign scholars.

But fluctuating exchange rates have sparked fears that this income stream could be cut, as students from countries like India, China and the Singapore opt for courses in Australia, where it is now less expensive for them to study.

Aston, City, Exeter, East London, Middlesex and East London universities, plus the Royal Academy of Music and the School of African and Oriental Studies in London, would all post deficits if they suffered even a modest reduction in overseas students, according to an analysis of 2006/7 financial data by accountants Grant Thornton for the Times Higher Education supplement.

The report warned that the Chinese and Indian governments could seek to exploit the current exchange rates by buying up places at Australian universities en masse, and directing students not to study in the UK.

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The universities named in the report said they did not expect to go into the red. "We have been rapidly increasing our share of the international student market," said an Exeter University spokesman. "The exchange rate is favourable for international students and with the 1.5 base point cut likely to get more so."